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After starting the year at the fastest pace in nearly a decade, sales of previously owned homes fell more than expected in February as tight inventory and rising home prices stifled purchases.

Existing home sales fell 3.7 per cent last month to an annualised pace of 5.48m, the National Association of Realtors said on Wednesday. That was steeper than economists’ estimates of a drop of 2.5 per cent to an annualised pace of 5.55m homes.

A breakdown by region showed that sales fell in the Northeast, Midwest and the West, but inched up in the South.

“Realtors are reporting stronger foot traffic from a year ago, but low supply in the affordable price range continues to be the pest that’s pushing up price growth and pressuring the budgets of prospective buyers,” Lawrence Yun, chief economist, said.

The report showed that median existing home price for all housing types rose 7.7 per cent from a year ago to $228,400 and marked the 60th consecutive month of home price gains. That came as the unsold supply of homes inched up to a 3.8 month supply at the current sales pace, from 3.5 month supply in January.